IT staffing: When to retrain, when to hire fresh

Staffing new projects is no picnic these days -- skilled help is in short supply, but retraining takes time and money, and doesn’t always work. Here’s how to decide which path to take.

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As more companies undertake digital transformation projects, having the right IT professionals with the right skills has become more important than ever.

IT managers gearing up for such projects say they particularly need experts in big data, analytics and cybersecurity -- the very skill sets that are in acute short supply. Even if they are able to find candidates, there are usually not enough or not exactly the right match. And training existing staff for in-demand skills is challenging and takes time.

“When we’re moving into the cloud, social, mobile computing and big data, it’s not business as usual,” says Diane Berry, research vice president of CIO workforce management at Gartner. “These are whole new areas that are transforming industries. It’s significantly harder to reskill in these areas, which puts pressure on [IT managers] to really take a look at their people and planning.”

To make matters worse, CIOs aren’t very good at workforce planning. According to a 2010 Gartner study, less than a third of IT organizations had a formal process to make informed decisions on when, where and what types of IT skills they will need.

And a 2016 survey by staffing and training company TEKsystems revealed that 68% of respondents think it's more challenging to staff IT projects today than five years ago. Of the 53% who said they have a formal, strategic plan for their workforce, 74% reported that responsibility for that strategic plan was held by a manager or director rather than upper-level management. And 73% reported that they only start planning for the workforce for a project within 90 days of needing the staff.

“There’s a desire to be more strategic, but there’s a struggle in how to actually make that happen,” says Kevin Holland, director, learning and IT transformations solutions at TEKsystems.

Clearly, the potential is there for companies transitioning from the traditional IT model to a new digital, cloud-based model to be caught flat-footed when it comes to staffing. Computerworld talked to IT leaders at organizations large and small to see how they’re handling the issue. Read on for their insights on when to retrain current workers and when to hire fresh IT talent.

Coping with skills demands

According to Computerworld’s Tech Forecast 2017 survey of 196 IT managers, directors and executives, the skills most difficult to hire for are security (25%), programming/application development (15%) and business intelligence/analytics (14%).

Asked how they planned to manage around these shortages,

  • 49% of survey respondents said they would outsource or hire contingent workers,
  • 42% said they would increase current employee training,
  • 28% said they’d re-evaluate their recruiting process, and
  • 28% said they’d create flexible organizational/team structures and operating models.

It’s important to have Plans B, C and D in place, because the challenge -- both in hiring and in training -- is only going to grow, enough so that it could significantly impede major IT projects, according to tech managers and industry watchers.

The success of digital transformations depends on getting a critical mix of IT skills and experience just right, says David Foote, chief analyst and co-founder of Foote Partners. There isn’t enough talent at the right level of experience in the marketplace to satisfy demand, he says, and what’s more, technology is advancing so fast that companies will increasingly struggle to get that mix right.

In talking with tech leaders on how they’re tackling the problem, it becomes clear that an organization’s strategy is closely tied to its size.

Larger companies typically ramp up training -- no surprise, say analysts, because they have the budget and likely a training infrastructure already in place. Midsize and small companies, which don’t always have the luxury of those resources, have to get creative.

“The big boys are able to develop their own boot camps and training centers,” Gartner's Berry sums up. “Midsize organizations struggle. They don’t have the resources or the expertise to do that type of training.”

Accenture shifts workers from server to cloud

Because Accenture’s business is based on helping clients adopt new technologies, training has always been important to the company, says CIO Andrew Wilson, who oversees a workforce of 400,000 people. The company has an annual training budget of $800 million. But this year, as the company completes its move to the cloud, retraining employees in new IT skills is an even higher priority.

Accenture Andrew Wilson Accenture

Accenture CIO Andrew Wilson

With 64% of its business already in the cloud, Accenture has already retrained much of its staff. IT professionals who had been standing up servers on-premises now design cloud architecture, Wilson says.

Now he has a growing need for skills to oversee platform services from companies like SAP or Microsoft. “In 12 months, I’ll be pretty much entirely in the cloud and running a platform economy,” Wilson says. “My IT organization needs to be completely different in order to do that.”

At AT&T, new hires help retrain existing staff

At AT&T, which is undergoing a massive workforce retraining program, managers identify needed skills and create a plan for sourcing them internally. While there are certain skill sets that AT&T can currently get only by hiring, its goal is to then use these new hires to train existing staff, says Scott Smith, senior vice president of human resources operations at AT&T.

For example, e-commerce projects need people with a combination of skills: web design, web analytics, marketing and advertising. “That’s a fairly new type of position, and we’ve hired there,” says Smith. “But now that we’ve had it awhile, we’re also doing internal training.”

AT&T Scott Smith AT&T

Scott Smith, SVP of human resources operations at AT&T

The telecommunications giant has followed the same pattern with big data skills. Most recently, AT&T finds itself in need of people with skills in artificial intelligence and augmented reality. “We’re not going to have very many people that have expertise in that area,” says Smith. “So we’ll do some hiring externally, and build our competencies, then as we scale we’re able to train more internally.”

To encourage internal employees to increase their skills, AT&T has them maintain a “talent profile,” an internal resume that includes any recent or ongoing training. When the company posts new positions, it not only describes the job and skill requirements but includes details designed to encourage training, such as the rate of promotions and the market salaries for such jobs. “We are transparent in how our jobs are changing, which shows employees where they should be spending their time if they want to plot their future,” says Smith.

Most of the training is reimbursed by the company, he says. The company spends about $250 million in training annually.

FINRA asks employees to “upskill” themselves

It’s one thing to encourage staff to retrain when the company pays for it, but quite another when it does not.

The Financial Industry Regulatory Authority (FINRA) recently completed a project that moved its market surveillance and regulation operations from an on-premises private data center to a cloud-based, open source-based platform, says Saman Michael Far, senior vice president of technology, who’s in charge of an IT staff of about 1,100.

Those operations process some 75 billion events each day, alerting staff to certain events that require further analysis for possible fraud. When the project began, “We realized that people with knowledge of cloud and big data were few and far between,” he says. “So we wanted to use existing staff as much as possible.”

At the same time, FINRA did not have a big retraining budget. Instead, Far encouraged staff to upskill themselves. He explained the transformation project and described interesting opportunities it created for those with the right skills. From there, IT staff “self-selected” into retraining -- those who were curious and ambitious invested in learning new skills and competed for the new jobs (a total of about 500 to 600 positions, Far estimates).

And those who didn’t? The IT department did have “significant turnover in mid-level leadership,” Far acknowledges. “People that had been in place for many years, who were in those positions because they had domain knowledge [about legacy operations], became less valuable, and people who were two levels down rose up and distinguished themselves.”

Even when FINRA tried to hire from outside, it usually couldn’t find the exact skills it was looking for, such as deep big data framework expertise in Hadoop or Spark. So it hired people who had “adjacent job experience” and were willing to learn. For example, IT might hire someone who knew relational databases and wanted to learn Hadoop, says Far. “We found that more effective than going out and looking for ready-made skills,” he says. “In a sense, it was the same process we were following internally.”

O.C. Tanner: Using word-of-mouth to attract new hires

At smaller companies, the challenge can be not only hiring new staff or retraining existing staff, but keeping current staff. At O.C. Tanner, which develops employee recognition and engagement software and applications, Senior Vice President and CTO Niel Nickolaisen takes pains to make sure his staff of 180 IT professionals feels recognized and engaged.

“Keeping people is probably our first goal,” he says -- a challenge in Salt Lake City, a current hot spot for IT hiring, especially for software engineering. Nickolaisen says that in 2015, all higher educational institutions and code camps generated about 1,500 IT grads in the state, while the economy generated 15,000 new IT jobs. He has to compete with large companies in the area like Oracle, Adobe and eBay, as well as a raft of startups.

One way he recruits new hires is by sponsoring local user groups and encouraging his engineers to be involved. “They tell the others in the group about some of the interesting things we are working on. People say, ‘Wow, do you have any openings?’ That’s paid off like you wouldn’t believe.”

He also gets creative in encouraging his staff to learn new skills. When the company launched a replatforming project, Nickolaisen had four report writers when what he needed was data analysts. He used his budget to offer those employees some formal training in Tableau. “These people already knew the data, they just needed to learn new tools.”

Those employees that show curiosity and aptitude he trains in more advanced analytics, and those that become experts in areas and have an interest in sharing, he turns into teachers. For instance, a staffer who’s become an expert at Node.js, a front-end development framework, is given time to develop and conduct training classes.

At CPFIUOE, consultants help train staff

Small companies often have the least resources to hire or train. Gregory Drauch is manager of information management systems at the Central Pension Fund of the International Union of Operating Engineers. The nonprofit employs 70 people, including nine IT staff. After he joined the organization early last year, one of Drauch’s first priorities was to upgrade skills, particularly in security.

CPFIUOE Gregory Drauch CPFIUOE

Gregory Drauch, manager of information management systems at CPFIUOE

Hiring a security specialist (at an estimated salary of $125,000 to $150,000) was out of the question. So Drauch suggested hiring a managed security provider, which would run $40,000 to $45,000 a year. “But even that is a big number for an organization that’s trying to keep costs down,” he says.

Management is still considering that option. Meanwhile, Drauch is thinking about investing in online training as well as hiring consultants in security and other specialties to help with certain projects -- with the expectation that his staff, working side-by-side with consultants, will learn new skills in the process. “That will get us started moving down this path sooner than if we tried to learn it all ourselves.”

Computerworld's IT Salary Survey 2017 results
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